With sellers dominating the Ethereum price trend, is below $2,000 a potential drop point in this market crash?
Amid $2.25 billion in broad market liquidations, Ethereum took a hit of $608.39 million. This massive liquidation led to a nearly 15% drop in Ethereum’s market price over the past 24 hours, with a 24-hour low at $2,118.
Will Ethereum continue its downward trend in this sloping market? Let’s explore.
Ethereum Price Drop Breaks Key Support Levels
On the daily chart, Ethereum’s price action shows three consecutive bearish candles, with the most notable being a nearly 24% drop from a high near $3,437.
The pullback phase also broke below the local support trendline, signaling a bearish breakdown.
Furthermore, Ethereum’s price is stretching the lower Bollinger band as the decline gains momentum. With a triple black crow setup, the DMI indicator shows a significant spike in the VR lines.
As the VI lines maintain a bearish alignment, the surge in momentum is further reflected in the ADX line’s uptick. Together, these technical indicators suggest a sell signal for Ethereum.
Ethereum will likely find potential support near the $2,396 level as the decline continues. On a more optimistic note, this could set the stage for a V-shaped reversal, possibly retesting the broken support trendline at $2,900.
Whales Dumping ETH
As Ethereum undergoes a significant drop, two dormant Ethereum whales have emerged after six years to book profits right before the broader market crash. These whales deposited 135,548 ETH, worth nearly $400 million, to exchanges.
They initially withdrew ETH at just $153.65 in January 2019 from Bitfinex. This trade suggests a staggering return of 1,817%, locking in $378.3 million.
Despite the old whales selling off their long-term holdings, new whales are purchasing ETH at discounted prices. In the recent crash, a whale known as “seven siblings” spent $111.72 million to acquire ETH.
The whale accumulated 45,047 ETH at an average price of $2,480. As ETH currently trades around $2,600, the whale’s decision to buy against the trend is proving profitable.
Ethereum Open Interest Plunges
The ETH derivative market reflects significant bearish speculations amid the increasing liquidations and whale activity. The ETH open interest is down by 25% to $23.76 billion.
ETH Derivatives
Due to the massive liquidations, the decline in open interest has contributed to a surge in bearish positions. This is reflected in the long-to-short ratio, which now stands at 0.9029.
As bullish support declines, the funding rate has also dropped to 0.0033%, signaling growing selling pressure.
In sum, Ethereum faces intense bearish pressure following a sharp 15% drop and massive liquidations totaling $608.39 million.
The breakdown below key support levels signals a continued downside toward $2,396. However, renewed whale activity and potential lower-level accumulation hint at a possible V-shaped recovery to retest $2,900.
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